Affordable Care Act and Business

affordable care act

The Affordable Care Act is health care reform legislation that was passed in March 2010. The full regulations aim to provide coverage to uninsured Americans. The key mechanism for insuring this group of people is the employer mandate. Any business that employs at least 50 full-time workers is obligated to provide them with health insurance or pay a penalty. According to the Care Act definitions 30 hours a week is considered full time. So a vastly larger working population is now considered full-time and eligible for health benefits. Adding to the issue is that the number of full time workers in a business is determined by totaling the number of hours that all employees work and then dividing that number by 40 hours a week. That means part time workers, depending on the number of hours they work, could add up to a full time employee or two. The implementation of this reform has had serious implications for businesses and it hits right at the heart of hiring.

Should businesses just bite the bullet and offer everyone health insurance or is it worth it to pay the penalty? Could they possibly get around the mandate if they cut hours and outsourced some jobs? It is a foregone conclusion that every business in America is having a similar debate.

The law has other features that have had an impact on the insurance population. The law allows young adults to stay on their parents’ plans until they reach age 26. As of June 2012 more than 3 million young adults gained insurance coverage because of this change— a 10.4 percent increase in the number of insured young adults from 2010. Of the 13.7 million young adults with this source of coverage, about 6.6 million would not have had this option before the Affordable Care Act.

The Affordable Care Act’s “catastrophic plans” are another option for young adults who might still find premiums in the non-group market unaffordable. In the past, catastrophic plans only protected individuals in emergency circumstances. These plans would typically not have included routine primary care or preventive services, and in cases in which these services were covered, the plan-holder would first have had to meet a very high out-of-pocket deductible.

With the rest of the Affordable Care Act going into effect on January 1st, 2014, everyone in the United States will be affected in some way. You will see improved care and lower healthcare costs for healthy and unhealthy people, but you can expect some negative effects and that will be on businesses and the amount of money they will have for hiring new talent.

Source: “How the Affordable Care Act Helps Young Adults.” Name. N.p., n.d. Web. 02 June 2013.

Andrea

Andréa Venezio , Chief Executive Officer
(972) 232-7700 | andreav@sapphirehg.com

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